Editing 2101: Technical Analysis

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The theoretical value of a stock is its [https://en.wikipedia.org/wiki/Net_present_value net present value] which is the sum of all its future earnings, with earnings in the future discounted appropriately to account for the {{w|time value of money}}. Because these earnings are never fully predictable, traders may have different ideas about the true value of a stock, and buy the stock if they believe the currently offered prices are particularly low, or sell it when the prices are high.
 
The theoretical value of a stock is its [https://en.wikipedia.org/wiki/Net_present_value net present value] which is the sum of all its future earnings, with earnings in the future discounted appropriately to account for the {{w|time value of money}}. Because these earnings are never fully predictable, traders may have different ideas about the true value of a stock, and buy the stock if they believe the currently offered prices are particularly low, or sell it when the prices are high.
  
Technical analysis, however, does not even attempt to understand the earnings of the stock, instead focusing on the shapes and patterns that result from traders making their moves. While there is a human behavioral component to stock trading, it is not clear that one can extract much information from the shapes of stock charts. To the extent it does work, a substantial part of its success may be simply an artifact of the herd behavior of traders who engage in technical analysis, a zero-sum game.
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Technical analysis, however, does not even attempt to understand the earnings of the stock, instead focusing on the shapes and patterns that result from traders making these their moves. While there is a human behavioral component to stock trading, it is not clear that one can extract much information from the shapes of stock charts. To the extent it does work, a substantial part of its success may be simply an artifact of the herd behavior of traders who engage in technical analysis, a zero-sum game.
  
 
The comic displays a {{w|Candlestick chart|stock price chart}}, annotated with labels which purport to be technical analysis. These labels are nonsense from the perspective of technical analysis, but do accurately describe the graph itself: "{{w|allegro}}" (a musical term used to set the tempo at the beginning of a score), "{{w|prologue}}" (an introductory section of a play, book, or similar), "{{w|lumbar}} support" (the thing in a chair shaped to better support your back), "bathtub" (possibly a reference to the so-called "{{w|Bathtub curve}}"), "{{w|uptalk}}" (a speech pattern). One label celebrates that "these two points define a line! Promising signal." (In geometry, any two points define a line.)
 
The comic displays a {{w|Candlestick chart|stock price chart}}, annotated with labels which purport to be technical analysis. These labels are nonsense from the perspective of technical analysis, but do accurately describe the graph itself: "{{w|allegro}}" (a musical term used to set the tempo at the beginning of a score), "{{w|prologue}}" (an introductory section of a play, book, or similar), "{{w|lumbar}} support" (the thing in a chair shaped to better support your back), "bathtub" (possibly a reference to the so-called "{{w|Bathtub curve}}"), "{{w|uptalk}}" (a speech pattern). One label celebrates that "these two points define a line! Promising signal." (In geometry, any two points define a line.)

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